AUD: Australia’s April CPI Inflation Hits 3.6% YoY, Beats 3.4% Forecast
The Australian Consumer Price Index (CPI) data for April came in at 3.6%, compared to 3.5% in March and higher than the 3.4% expected by economists. Additionally, the data for construction work done in Q1 showed a decline of 2.9% quarter-on-quarter, a significant drop from the 0.5% growth recorded in the previous quarter. Following the release of this data, the Australian Dollar moved higher against other currencies.
AUDUSD Market price has broken Ascending channel in downside
Australia’s monthly Consumer Price Index (CPI) increased at an annual pace of 3.6% in the year to April, rising slightly from the 3.5% recorded in March, according to data published by the Australian Bureau of Statistics (ABS) on Wednesday.
Economists had anticipated a more moderate increase, with market consensus forecasting a 3.4% rise for the reported period.
In other economic news, the Australia Construction Work Done data for the first quarter showed a decline of 2.9% quarter-on-quarter, significantly missing expectations of a 0.5% growth. The previous quarter had seen a growth rate of 0.7%.
AUD: Australia’s Inflation Hits 3.6% in April, Unexpectedly
The Australian Consumer Price Index (CPI) for April was 3.6%, up from 3.5% in March and above the expected 3.4%. Construction work done in Q1 fell by 2.9% quarter-on-quarter, compared to 0.5% growth in the last quarter. The Australian Dollar strengthened against other currencies following the news.
AUDCHF is moving in Ascending channel and market has fallen from the higher high area of the channel
The inflation rate has exceeded expectations, rising to 3.6% in the 12 months to April.
The consumer price index increased slightly from the year-on-year March figure of 3.5%, according to the Australian Bureau of Statistics.
Economists had expected the monthly price gauge, which can be volatile and is not as comprehensive as the quarterly indicator, to moderate to 3.4% in April.
Households have been financially strained by the high cost of living and the series of interest rate hikes aimed at controlling price pressures.
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The Reserve Bank of Australia remains vigilant to inflation risks as it works to bring inflation back within its 2-3% target range.
The central bank forecasts that inflation will take until late 2025 to fall within the target range.
The head of prices statistics for the ABS, Michelle Marquardt, noted that inflation had been relatively stable over the past five months.
Although this is the second month in a row where annual inflation has had a small increase, she said on Wednesday.
Charu Chanana, Saxo’s head of foreign exchange strategy, stated that Australia’s faster-than-expected April inflation raises concerns about the “final stretch” to bring inflation down.
“This could continue to give reason to the RBA to postpone rate cuts, but is unlikely to bring rate hikes back on the table given the loosening Australian labour market and stretched consumer,” Chanana said.
IG Australia market analyst Tony Sycamore said the result raised questions about the pace of inflation dropping back towards the target band.
“The runway for the RBA to deliver households an early Christmas gift in the shape of a December rate cut has narrowed,” he said on Wednesday.
Federal Treasurer Jim Chalmers noted that “the monthly inflation indicator can be volatile and is less reliable than the quarterly measure because it doesn’t compare the same goods and services month to month”.
“The quarterly measure shows the direction of travel is clear with annual inflation having almost halved since the Albanese Labor government came to office,” he said. “The ABS confirmed very clearly again today that inflation would be higher were it not for our cost-of-living policies.”
The main contributors to the annual increase were housing (4.9%), food and non-alcoholic beverages (3.8%), alcohol and tobacco (6.5%), and transport (4.2%).
AUD: April 2024 CPI Rises 3.6% YoY
The Australian CPI Data for the month of April came at 3.6% versus 3.5% printed in the March month, and 3.4% expected. Construction work done for Q1 came at -2.9% QoQ versus 0.50% printed in the last quarter. Australian Dollar moved higher against counter pairs after the news came.
AUDCAD is moving in box pattern and market has rebounded from the support area of the pattern
The monthly Consumer Price Index (CPI) indicator rose by 3.6% in the 12 months to April 2024, according to the latest data from the Australian Bureau of Statistics (ABS).
Michelle Marquardt, ABS head of prices statistics, stated, “Annual inflation increased to 3.6% this month, up from 3.5% in March. Inflation has been relatively stable over the past five months, although this is the second consecutive month with a small increase in annual inflation.”
The most significant contributors to the April annual rise were Housing (+4.9%), Food and non-alcoholic beverages (+3.8%), Alcohol and tobacco (+6.5%), and Transport (+4.2%).
“CPI inflation is often impacted by items with volatile price changes like Automotive fuel, Fruit and vegetables, and Holiday travel. It can be helpful to exclude these items from the headline CPI to provide a view of underlying inflation.
“When excluding these volatile items from the monthly CPI indicator, the annual rise to April was steady at 4.1%. Annual inflation excluding volatile items remains higher than for the monthly CPI indicator,” Ms. Marquardt said.
All Groups Monthly CPI Indicator, Annual Movement (%):
Housing rose 4.9% in the 12 months to April, down from 5.2% in March. Rents increased 7.5% for the year, reflecting a tight rental market and low vacancy rates across the country.
New dwelling prices rose 4.9% over the year, with builders passing higher costs for labor and materials onto consumers. Annual price growth for new dwellings has been around 5% since August 2023.
Electricity prices rose 4.2% in the 12 months to April. The introduction of the Energy Bill Relief Fund rebates from July 2023 has mostly offset electricity price rises from annual price reviews in July 2023 due to higher wholesale prices.
“Excluding the rebates, electricity prices would have risen 13.9% in the 12 months to April 2024,” Ms. Marquardt noted.
Annual inflation for Food and non-alcoholic beverages rose to 3.8% in April, up from 3.5% in March. All food categories except Meat and seafood contributed to the annual rise.
Fruit and vegetable prices recorded their largest annual rise since April 2023, reflecting unfavorable weather conditions that reduced the supply of berries, bananas, and vegetables such as lettuce and broccoli.
Food and Non-Alcoholic Beverages, Australia, Annual Movement (%):
Transport prices rose 4.2%, mainly due to higher fuel prices compared to April last year. Automotive fuel rose 7.4% in the 12 months to April, following an 8.1% annual rise to March.
Fuel prices rose 2.2% in April, the third consecutive monthly rise, reflecting higher wholesale fuel prices.
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